• 2021 December 10

    From Whom: Vitaliy Chernov


    About: Environmentalism: two sides of the same coin

    Environmentalism: two sides of the same coin

    The agenda of carbon footprint reduction seems to be the major global trend being second only to the pandemic. Russia is also involved. Whether we want it or not, whether we agree or disagree, ESG ideology will play an increasingly significant role in the industry and in the transport segment. What is it going to bring in reality?

    An access to financing will become more difficult without carbon footprint estimations or ESG reports: almost all major financial institution, including Russian ones, have already sworn allegiance to a ‘green agenda’.

    On the one hand, a well-turned ESG report and a smart promotion of a company’s ‘greenness’ can ensure competitive advantages: perhaps, tax privileges and definitely, access to cheaper financing. On the other hand, that will result (already results) in development of a grey market of ESG reporting which has already caused concerns of Russia's environmental watchdog, Rosprirodnadzor.

    It is good that Russia has succeeded in inclusion of nuclear power engineering into the carbon footprint reduction agenda having thus secured its competitive advantages. Russia has been holding leadership in this segment and operating nuclear-powered fleet for decades. However, Russia's ecological projects are militated against under a pretext of fighting carbon footprint. French President has recently banned banks in the country from financing the Arctic LNG 2 project which is aimed at production and liquefaction of natural gas although this fuel is more environmentally friendly than coal and oil products. In this context, RF Government has launched a pilot project to practice the mechanisms of carbon-neutral transition on the Sakhalin where LNG is also produced with the first shipment of carbon-neutral gas already performed. 

    Anti-LNG movements taking shape throughout the Western world queerly coincide with the implementation of the related Arctic projects and the growth of LNG exports from Russia. Only half a decade ago only the lazy were not lavishing praise on low footprint of natural gas with its ideal compatibility with IMO restrictions on sulphur content in marine fuel but now, at least in the Western countries, it is scornfully referred to as a “fuel for a transition period” which can be (or even should be) skipped in favour of the era of methanol, hydrogen, ammonia and electricity. Meanwhile, there are actually no technologies ready for their commercial introduction today. On the plus side, various funds can be asked for grants to subsidize the development and introduction of such technologies.

    Debates on which fuel is cleaner seem to continue forever and depend on the interests of the stakeholders. For example, those claiming wind power to be clean hardly take into account its negative impact on microclimate or the carbon footprint of wind farm components and materials production. That is also true for solar power projects and other alternatives. So, there is a will, there are arguments for or against certain types of fuel.

    What should be done in this respect? Perhaps, there is a universal solution – diversification. As the Chinese say, let a hundred flowers bloom: LNG, atomic power and hydrogen will take their market niches in any case.